CORRECTED-UPDATE 1-New strike reported at China parts supplier

Tue Jun 22, 2010 1:22am EDT

(Corrects multiple references to show that Denso (Guangzhou Nansha) Co Ltd is wholly owned by Denso Corp, not a joint venture. Inserts full name of Toyota joint venture in 6th paragraph)

* Production at Denso parts plant halted because of strike

* Plant supplies parts to Honda, Toyota, others

* Strike the latest in a string of China labour disputes

By Yumiko Nishitani and Alison Leung

TOKYO/HONG KONG, June 22 (Reuters) - A strike has halted production at a Chinese factory owned by Japan's Denso Corp (6902.T), a car parts maker affiliated with Toyota Motor Corp (7203.T), the latest in a string of work stoppages to hit foreign operations in China.

A strike at Denso (Guangzhou Nansha) Co Ltd had halted supply of its fuel injection equipment and other products to Toyota, Honda Motor Co (7267.T) and other carmaker clients since Monday, Denso spokeswoman Yoko Suga said.

The stoppage at the factory, located in China's industrial heartland, is the most recent in a series of labour disputes across the country. In recent weeks, strikes have broken out at a supplier of locks to Honda, a Toyota Gosei plant and Chongqing Brewery Co Ltd., among others. All have since been resolved.

Management of company were negotiating with workers over demands for higher wages and better benefits, said Suga.

A spokesman for Honda China said car production at Honda's Chinese car making joint venture was continuing as usual.

A GAC Toyota Motor Co spokesman was not immediately available for comment. GAC Toyota Motor is the Japanese carmaker's Guangzhou joint venture.

The wage rises demanded by factory workers in China would add little to the cost of products made in China, meaning the country's role as a manufacturing base appears secure. But the outbreak of disputes presents a tricky challenge for China's ruling Communist Party, which has vowed to improve incomes but is jittery about protests.

China's leaders, who are obsessed with maintaining social stability but also say they can ensure a better life for those at the bottom end of an expanding rich-poor gap, have muted coverage of labour disputes in state media while expressing public support for workers. (Additional reporting by Fang Yan, writing by Don Durfee; Editing by Chris Lewis)

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